No one plans to go into debt, but many people wake up one day to find themselves in trouble. It’s an insidious problem that creeps up over time and is exasperated when an overused maxim is ignored – the devil is in the details. There are two important areas of money management that can help you keep your debt to a minimum. First are the small print details for each account that may contain snags that can compromise your efforts. Second is the way you prioritize the order of your payments.
The essential details of each financial account are included in the terms and conditions. This includes for saving accounts, where you hope to grow your money, credit accounts and other finance related agreements. While many people avoid reading the small print because they expect it to be too technical, it’s good to know federal laws have mandated that they be made clearer and easier to understand for the average American. Become educated about the effect these details could have on your finances or potentially pay the piper down the road. For example, credit card agreements generally charge a penalty for paying late. If you ignore the terms and repeatedly pay late, you’ll make little progress in getting out of debt.
The benefits of prioritizing payments may be less apparent. If you choose to make payments in an aimless way, you could end up making your situation worse, especially if you have limited funds. Planning the best order in which to pay your bills is highly personal and dependent on the types of bills you have, but there are some general rules that everyone should follow.
Number One Priority – Where You Live
Home is the center of our lives and the most important debt to protect. This should always be your first priority. Falling behind or defaulting on your mortgage or rent payments is the first step down a slippery slope that eventually ends in foreclosure or eviction, if left untended. Losing your home is one problem that is difficult to correct. Being habitually late in making payments will damage your credit score. In either case, landlords and lenders will be less than cooperative in getting you back into a new place if you find your self removed from a residence.
Two additional payments attached to homeownership that need to be included in your top priority list along side the mortgage or rent payments.
Property Taxes –An easy way to make sure your property taxes are paid is by adding them to your mortgage payment. If your mortgage holder doesn’t provide this service, pay them monthly as you do your cell phone or cable bill. Avoid waiting until the annual payment is due, unless you’ve been setting the payment aside during the year. A year’s worth of taxes is often substantial and a burden that can be eased by planning ahead. Laws set in place allow a tax lien to be imposed on your property to secure the payment of taxes. This will make selling the property impossible until the taxes have been paid in full.
Property Insurance – Not necessarily a debt, but an essential payment to protect your investment. Lenders and landlords require insurance coverage to protect their investment and property. As long as you carry a mortgage with a bank, the loan is contingent on your home being properly insured.
Asset Backed Debts
Loans that are approved based on collateral that you’ve agreed to put up is the second on the list of priorities. These include loans for real estate, automobiles and luxury items like jewelry and boats. If you fall too far behind, the lender can repossess your asset, resell it and still expect you to make good on the loan – leaving you with a bill for a product you no longer have. In the case of a car loan, there may be additional unintended consequences of not only the loss of transportation but it may put your job in jeopardy.
The IRS has the authority to put a lien on your assets, if you fail to pay your taxes. So your home, the boat you love, the hunting cabin in the woods, even the money in your bank account can become the property of the U.S. Government. They also have the legal right to garnish you wages to pay your taxes. And don’t forget about your state taxes; they too will garnish you wages, take you to court and place liens on your assets to recoup the tax revenue you fail to pay.
Federal Student Loans
Most of your debts may be dissolved when you declare bankruptcy, but not student loans. It’s the one obligation that will never go away through bankruptcy. The IRS has the authority to withhold your tax refund and apply it to your student loan debt. Your wages may be garnished and you could lose out on other opportunities to use federal loans for further education or subsidized loans for housing.
Unpaid medical bills can ruin your credit rating and result in your wages being garnished or a lien placed on your assets. If you’re finding it difficult to pay your medical bills, many healthcare facilities will help design a payment plan that works with your situations. If you ignore your obligation to pay your medical bills, the account may be sent to collections to attempt to get you to pay up. If that isn’t successful, you may be sued for payment.
Unsecured debts like credit cards may be last in our list of payment priorities, but don’t be confused in thinking that this type of debt is less harmful when neglected. Always make the minimum payment or more on all unsecured debts. Miss a payment and the credit card company will attempt to coerce you to pay. Failing, they will send the account to a collection agency to try again. In the worst-case scenario, the card issuer may sue you and ask the court for permission to take your assets or garnish your wages.
A list of payments priorities will help to keep you organized and focused on what’s important but should never be seen as an invitation to avoid your responsibilities. There’s just too much on the line that can impact your financial future. Always honor your debts, even if you can only make a small payment each month.
Noreen Ruth is a writer for www.debtomg.com and multiple financial blogs and websites. She strives to provide readers with the most up-to-date information on debt management, credit services, saving money and other financial issues. Her goal is to help educate consumers about topics that may impact their ability to manage their credit/debt responsibly.
This is a guest post written by My Moving Reviews, they can help you find a mover that you can trust if you do have to move!
As a whole, moving is considered as the third most stressful experience right after events like death in the family and divorce. People move for various reasons, but mostly due to a new job. When you are offered a new career opportunity far from your home, inevitably comes the question: “Should I accept and move?” In order to make a sensible choice whether you should move, you should take into consideration all of the aspects involved in such endeavor, not just a couple of the factors. Like in every other decision in our life, pros should outnumber cons, otherwise instead of beginning a fresh story with enthusiasm and confidence, we might find ourselves in a woeful story feeling so frustrated.
Salary And Living Standard
Moving for a job doesn’t necessarily mean that you will make more money and have a better standard of living. You are offered a bigger salary, and you accept the job offer without considering the cost of living in the area you will live – do not take that risk. Another mistake you should avoid is not supplying enough financials for a couple of months ahead. People who have lined up a good job before the move tend to be too confident. When the fine line between confidence and cockiness is crossed, bad things happen, figuratively speaking. When you have secured a steady income, that doesn’t mean you should ignore the “saving-money step” of the relocation process.
Other moving related tasks that have to be taken care of concern the properties – the one you will leave and the new one you are moving in. There is not much to be discussed if you are renting the old place, but the fact that you have to notify your landlord in a timely manner and deal with the paperwork. On the other hand, if you are selling the property, keep in mind that you will have to pay brokers’ and lawyers’ fees. Also, an extensive research on the real estate market in the new area should be done. A common mistake that people who move due to a job make is rushing to buy a new property instead of renting at first. Sometimes, making a great deal means you have to wait a bit. Furthermore, getting familiar with the new environment will help you decide which neighborhood to choose to settle in.
Finding Reputable Movers
Moving is not a one-day job, but many people seem to approach it as a one-day engagement. If you don’t research movers, you can end up dealing with an unscrupulous and rogue moving company. This causes not only a lot of distress, but financial blunders too. Damages caused by movers might estimate in thousands of dollars. A moving company have to be registered with the Department of Transportation in order to operate legally. In some states like New York, Texas, California and Massachusetts additional certification is required by the local authority. When selecting a mover, look up their online reputation, read reviews and check the BBB record. Reading carefully the moving company’s paperwork before the moving day can ensure a safe ride for your belongings as well as make you aware of the possible problems that may occur between you and the mover. A very important and often forgotten precaution is purchasing insurance for the valuables. People usually confuse liability with insurance. By federal law, basically movers assume liability for no more than 60 cents per pound per item. In order to move a home cost-effective, you should get acquainted with all the potential moving related costs. Movers usually give price estimates for the moving service, but exclude fees for stairs, shuttle, long carry, packing labor, packing materials, hoisting, fuel surcharge and other small additional expenses in the initial quote. Many consumers find out about these fees no sooner than the moving day. If you want to manage the financials of the move successfully, full tariff should be required with all the company rates.
Cost Of The Move
The major cost-forming factors for interstate moves are the total weight of the household belongings and the packing services. To find out more about the average price, make sure you get an estimate, especially when moving a long distance. When moving locally (within the same state), moving companies usually charge per hour. In that case, factors as the number of stairs and the traffic between the both locations could greatly influence the price. And if the move is an overseas one, moving costs depend on the cubic feet. Plus, Customs’ fees apply and amplify the final cost of the moving.
The average cost for a long distance move such as move from New York to California for a 2 bedroom home is about $5000 – $6800 and this does not include the packing. The total cost for a full service move could easily go to about $7600. The major cost-forming factors for interstate moves are the total weight of the household belongings and the packing services. When moving locally (within the same state) moving companies usually charge per hour. In this case, factors as the number of stairs and the traffic between the locations could greatly influence the price. Moving a 2 bedroom home 20 miles away could cost about $900 to $1500 if packing service and packing materials are included. And if the move is an overseas one, moving costs depend on the cubic feet. Plus, customs’ fees may apply and amplify the final cost of the moving.
*The below post is a guest post from BusinessesForSale.com, great post about funding new ventures!
In the current economic climate, banks are still cautious about funding new ventures. There are plenty of less conventional ways to raise finance, however, one of which might suit your needs. Consider one of the following:
1. Crowd funding
Websites like Kickstarter and Indiegogo make it easy for new products and services to find their audience. With crowd funding, backers can pledge to support a project they’re interested in. If the amount pledged reaches the project’s target, funds leave the backers’ bank accounts and go into the project’s, while if the target is not reached the backers do not have to pay. Pledges can be as small as a dollar or go into the thousands, with rewards ranging from a simple thank you to a stake in the business. With crowd funding, your business can be funded by dozens, hundreds, or even thousands of individuals.
Consider this: if your business idea is innovative and appealing.
The downside: if the funding target is not reached, you receive nothing.
2. Seller finance
It may be possible to negotiate a deal in which the seller of the business you’re interested in lends you the money, or part of the money, to buy it. This can result in a quick, easy transaction in which the buyer pays less for the business, yet the seller receives more. The two parties should draw up an agreement listing the terms of the sale, including the rate of repayment, the final amount to pay, and everything included in the sale of the business.
Consider this: if the seller is as eager to sell as you are to buy.
The downside: can be risky on both parts.
3. Re-mortgage your home
You might already be in possession of the funds you need to start your business. They’re just wrapped up in your home. Taking out a second mortgage on your property or renegotiating an existing mortgage can be a way of releasing capital for you to spend on your business.
Consider this: if your business is the most important thing in your life.
The downside: as with any loan involving your home, consider the risks if you are unable to keep up with repayments.
4. Angel investors
Wealthy individuals who invest their own money in business ventures are known as angel investors, or simply angels. Whether motivated by personal interest in a project, by the prospect of later gain, or both, they can provide an essential injection of funds. In return, your angel may become a stakeholder in the project with a say in how it develops, or they may receive shares in the business but keep out of decision making. Websites and networking can help you connect with a suitable investor.
Consider this: if you need a hero.
The downside: you’ll need to prove your business is an attractive prospect.
5. Find a high-net worth business partner
Similar to option 4, but you’re looking for a partner rather than an investor, which requires a slightly closer relationship. Your business partner will share the responsibility for the business, and their name will be alongside yours on the paperwork. Whether they provide much actual input, other than financial, is for you and your partner to arrange between you.
Consider this: if you love to share.
The downside: potential clashes if you and your partner disagree over a business decision.
Sara Aisenberg is the executive writer for http://www.suretybonds.com, a nationwide surety provider that helps new business owners fulfill licensing requirements on a daily basis.
It’s been proven time and time again that good habits start at a young age, and personal financial management is no different. As a parent, it’s your job to help your children pave the road for future success, so consider the following lessons when teaching your children about money.
paidtwice’s note: When a new site run by a seasoned blogger, ABCs of Investing, approached me about running a guest post for them, I was intrigued. And the post itself really drew me in. As an investing newbie who is flying by the seat of her pants, I’ve appreciated the short, informative posts that appear on their site twice a week. So without further introduction, I hope you find this post as interesting as I did.
Do you clip coupons to save money? Do you know the “normal” prices of items on sale? Do you monitor your spending closely? Do you know anything about your investment costs?
Investments - they are one of those possessions that people love to ignore. As long as they have some then everything is ok and no further learning is necessary. Nothing could be further from the truth!
Retirement investments will usually end up being one of your larger assets and unless you have a good pension, one of your larger income streams.
Some of you might be thinking “I don’t have any retirement savings because I’m still working on my credit card debt”. But you will have savings at some point because you aren’t going to be in debt forever. Once you finish slaying the debt monster, then you should start using that free cash you have and save for retirement. You don’t have to be doing something in order to learn something about that something! Most people don’t want to read book after book on investing. They don’t want to go to a big website and read for hour after hour about investments. But they have to start somewhere and learning is the key to being a good investor. An informed investor is a good investor.
If you have already started saving for your retirement then congratulations! You are already on your way. However – do you know what kind of asset allocation you have? Do you know what asset allocation means? What kind investments do you own? What are the fees charged on those investments? What kind of accounts do you have?
You don’t have to be an expert on investments to be an investor but it sure helps to know something about them. It doesn’t matter if you have an financial advisor you work with – the more you know about investing then the better off you will be. Financial advisors are in business for their own profit – not yours. If you have to accept everything they tell you because you don’t know any better then it is time to get started with learning about investing.
Too bad! Nobody cares about your money like you do so it is up to you to learn as much as you can and make sure you aren’t being taken advantage of. Your partner is the investment guru in your family you say? Well, what happens if someday your partner isn’t your partner anymore and you have to do all the investing. Hopefully that will never happen to you, but if it does – wouldn’t it be nice if you had at least a solid knowledge of the investing basics?